Adds more details from analyst call
Delta Air Lines expects its jet fuel costs to roughly double in the second quarter as the conflict in the Middle East continues to restrict supply.
The company expects an all-in fuel price of $4.30/USG during the second quarter, Delta said this morning in its quarterly earnings call. Supply constraints and higher prices due to the war will add more than $2bn in additional fuel costs for Delta in the second quarter, chief executive Ed Bastian said on the call.
The company's first quarter adjusted fuel price was $2.62/USG, up nearly 7pc from a year earlier, with total fuel expenses totaling $2.6bn, a $330mn increase. Delta's 190,000 b/d Monroe refinery in Trainer, Pennsylvania, helped shave $0.06/USG off of its fuel costs.
The US and Iran agreed to a two-week ceasefire starting late Tuesday, but so far there are few signs that the flow of tankers through the strait of Hormuz has picked up significantly.
Earlier this week the US Energy Information Administration yesterday increased its jet fuel price outlook to $4.22/USG during the second quarter, compared with just $2.74/USG during the first quarter. That estimate assumed a full resumption in tanker traffic through the strait by the end of April.
Delta intends to limit capacity growth to flat year-on-year "until the fuel environment improves," Bastian said, which will help the company better manage higher jet fuel costs. Delta's "main cabin" capacity contracted by 3pc in the first quarter compared to the prior year.
The refinery is projected to add $300mn in profit during the second quarter, based on current prices, Delta said.
Delta's first-quarter revenue passenger miles — a measurement of miles flown by paying passengers — increased by 1pc annually to 56.47bn miles. Available seat miles — a measure of capacity — also increased by 1pc to 69.16bn in the first quarter.
The company expects more than 10pc annual revenue growth in the second quarter as it sees continued strength in corporate and consumer demand.
First-quarter operating revenue was up by 13pc annually to $15.85bn while the company reported a $289mn net loss — compared to a $240mn profit in the first quarter 2025.
Fleet operations
Delta took delivery of eight aircraft during the first quarter and ordered 95 additional aircraft, including Airbus and Boeing 787.
The company announced new routes between Austin and Phoenix and plans to expand services from Austin to Bozeman, Montana, starting next winter. This will bring the airline's total destinations out of Austin to 30 by the end of the year.
There will also be expanded services from Los Angeles to three destinations in Florida this winter, and a new nonstop flight from New York to Orange County, California, will begin on 7 May.
